BILLERICA, Mass. Oct. 28 /PRNewswire-FirstCall/ -- GSI Lumonics Inc.,
(Nasdaq: GSLI and TSX: GSI), a major supplier of precision motion components,
lasers and laser systems, today announced financial results for the third
quarter ended October 1, 2004. (All data are expressed in U.S. GAAP and in
U.S. dollars.)
Third Quarter Results
-- Sales were $90.7 million for the third quarter of 2004, compared to
$44.9 million for the same period in 2003; a 102% increase.
-- Net income was $12.1 million in the quarter, or $0.29 per diluted
share, compared to $0.6 million, or $0.01 per diluted share, for the
same period last year.
-- Bookings were $67.2 million for the quarter, an increase of 34% over
the same period in 2003. (74% of the increase or $12.6 million is
attributed to Westwind and MicroE acquisitions). Bookings declined
$18.0 million or 21% from prior quarter level of $85.2 million.
(exclusive of $8.5 million of MicroE backlog acquired in prior
quarter.)
-- Backlog was $77.7 million at the end of the third quarter, compared to
$47.6 million for the same period in 2003. ($24.4 million of the
increase is attributable to Westwind and MicroE.)
-- Gross margin for the quarter was 40.9% of sales, compared to 37.1% for
the same period last year.
-- Operating income for the quarter was 14.7% of sales, compared to 1.5%
for the same period last year.
-- Cash flow from operations was $8.2 million for the third quarter, as
compared to $7.8 million for the same quarter in 2003.
-- Cash, cash equivalents and marketable securities totaled $80.1 million
as of October 1, 2004.
Geographically, sales for the third quarter of 2004 were as follows:
approximately 41% in the Americas, 45% in Asia-Pacific, including Japan, and
14% in Europe.
Operating expenses for the third quarter of 2004 were $23.8 million
compared to $15.9 million for the same period last year. This increase is
mostly attributed to the Westwind and MicroE acquisitions.
The expected annualized tax rate for the fiscal year 2004 is expected to
be 10.9%. The tax rate for the third quarter of 12.3% reflects an adjustment
to year-to-year date tax expense to the expected annualized rate for fiscal
year 2004. This rate is significantly below our statutory rate, which is in
the 35-40% range, and anticipates utilization of deferred tax assets at U.S.
operations that were written down last year.
"Our third quarter results reflect the favorable impact of our
acquisitions and a solid performance in our laser system segment," stated
Charles Winston, GSI Lumonics President and Chief Executive Officer. "At the
same time, we are seeing a softening in demand as we go forward."
Business Segment Reporting
Laser Systems
Revenues in the Laser Systems segment were $40.9 million in the third
quarter of 2004, compared to $20.0 million in the same period last year,
reflecting strong shipments for all product lines. Gross margins at 43.8% as
compared to 36.2% over the same period last year improved as a result of
higher volumes, firmer pricing and cost reductions. These factors combined to
generate an $11.9 million operating income for this segment, as compared to
$2.7 million in the same period last year.
Components
Revenues of $42.1 million represented an increase of $24.1 million over
the same period last year. This increase was from the Westwind and MicroE
acquisitions. Gross margin was 37.3% compared to 35.5% in the same period
last year. Operating income for this segment, that was net of a charge of
$0.5 million related to severance expense incurred in the quarter, was $7.2
million versus $3.5 million in the same period last year.
Lasers
Revenues of $11.7 million were up $3.2 million over the same period last
year. Gross margins were 31.6% as compared to 36.9% for last year. The Lasers
segment reported an operating income of $0.7 million versus $0.5 million for
the same period last year. The favorable effect of the higher revenue was
offset by lower margin percentage and higher operating expenses.
Financial Condition
At October 1, 2004, cash, cash equivalents, and marketable investments
totaled $80.1 million, compared to $72.1 million at July 2, 2004 and $106.7
million at December 31, 2003. Amortization for MicroE acquisition was $0.8
million reflecting the first full quarter of amortization. The Company
continues to operate debt-free. Inventory turns were 3.6 for the quarter
compared to 3.4 for the last quarter. Days sales outstanding in receivables
remained at 63 at the end of the quarter which is down slightly from the last
quarter.
Following the announcement, GSI Lumonics will host a conference call for
investors at 5:00 p.m. Eastern Time. To participate, call 800-591-6942
(within the US and Canada) and 617-614-4909 (for international callers) no
earlier than 4:50 p.m. Eastern Time and no later than 4:55 p.m. Eastern Time
and identify yourself to the operator with the participant code of 56523792.
A replay of the call will be available one hour after the call ends to
midnight, November 12, 2004 by dialing 888-286-8010 (within the US and Canada)
or 617-801-6888 (for international callers). The access code is 91395934.
The conference call also will be broadcast live over the Internet in
listen-only mode. For live webcasting, go to:
http://phx.corporate-ir.net/phoenix.zhtml?c=75037&p=IROL-
eventDetails&EventId=952325
at least 15 minutes prior to the call in order to register, download and
install any necessary software. The call will be archived on the above web
site until midnight, November 12, 2004.
GSI Lumonics supplies precision motion control components, lasers and
laser-based advanced manufacturing systems to the global medical,
semiconductor, electronics, and industrial markets. GSI Lumonics' common
shares are listed on Nasdaq (GSLI) and The Toronto Stock Exchange (GSI).
Certain statements in this news release may constitute forward-looking
statements within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 27A of the United States Securities Act
of 1933 and Section 21E of the United States Securities Exchange Act of 1934.
These forward-looking statements may relate to anticipated financial
performance, management's plans and objectives for future operations, business
prospects, outcome of regulatory proceedings, market conditions, tax issues
and other matters. All statements contained in this news release that do not
relate to matters of historical fact should be considered forward-looking
statements, and are generally identified by words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "objective" and other
similar expressions. Readers should not place undue reliance on the forward-
looking statements contained in this news release. Such statements are based
on management's beliefs and assumptions and on information currently available
to management and are subject to risks, uncertainties and changes in
condition, significance, value and effect. Other risks include the fact that
the Company's sales have been and are expected to continue to be dependent
upon customer capital equipment expenditures, which are, in turn, affected by
business cycles in the markets served by those customers. Other factors
include volatility in the semiconductor industry, the risk of order delays and
cancellations, the risk of delays by customers in introducing their new
products and market acceptance of products incorporating subsystems supplied
by the Company, similar risks to the Company of delays in its new products,
our ability to continue to reduce costs and capital expenditures, our ability
to focus R&D investment and integrate acquisitions and other risks detailed in
reports and documents filed by the Company with the United States Securities
and Exchange Commission and with securities regulatory authorities in Canada.
Such risks, uncertainties and changes in condition, significance, value and
effect, many of which are beyond the Company's control, could cause the
Company's actual results and other future events to differ materially from
those anticipated. The Company does not, however, assume any obligation to
update these forward-looking statements to reflect actual results, changes in
assumptions or changes in other factors affecting such forward-looking
statements.
For more information contact: Investor Relations, 613-224-4868, Ann
Dempsey, (ext. 2#)
GSI LUMONICS INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
October 1, December 31,
2004 2003
ASSETS
Current
Cash and cash equivalents $63,220 $64,035
Short-term investments 10,974 39,562
Accounts receivable, less allowance
of $3,313 (December 31, 2003 - $4,465) 63,191 53,040
Income taxes receivable - 4,839
Inventories 59,852 43,916
Deferred tax assets 13,633 5,507
Other current assets 9,520 8,048
Total current assets 220,390 218,947
Property, plant and equipment, net of
accumulated depreciation of $26,199
(December 31, 2003 - $22,305) 49,380 52,982
Deferred tax assets 10,969 8,521
Other assets 2,589 2,297
Long-term investments 6,636 3,743
Intangible assets, net of
amortization of $26,246
(December 31, 2003 - $21,924) 52,082 23,985
Goodwill 31,094 -
$373,140 $310,475
LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Accounts payable $23,586 $18,218
Income taxes payable 754 -
Accrued compensation and benefits 13,056 7,424
Other accrued expenses 22,126 18,451
Total current liabilities 59,522 44,093
Deferred compensation 2,151 2,162
Deferred tax liability 13,315 1,879
Other liability 28 -
Accrued minimum pension liability 1,578 1,553
Total liabilities 76,594 49,687
Commitments and contingencies
Stockholders' equity
Common shares, no par value;
Authorized shares: unlimited;
Issued and outstanding: 41,215,471
(December 31, 2003 - 40,927,499) 307,482 305,512
Additional paid-in capital 2,714 2,800
Accumulated deficit (10,564) (43,440)
Accumulated other comprehensive loss (3,086) (4,084)
Total stockholders' equity 296,546 260,788
$373,140 $310,475
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
Three Months Ended Nine Months Ended
October 1, September 26, October 1, September 26,
2003 2004 2004 2003
Sales $90,671 $44,881 $250,061 $130,682
Cost of goods sold 53,573 28,237 147,705 83,659
Gross profit 37,098 16,644 102,356 47,023
Operating expenses:
Research and
development 6,562 3,123 17,323 9,955
Selling, general
and administrative 15,627 11,195 43,639 36,234
Amortization of
purchased intangibles 1,614 1,408 4,324 4,055
Acquired in-process
research and development - - 430 -
Restructuring - 264 - 2,451
Other - - - 841
Total operating
expenses 23,803 15,990 65,716 53,536
Income (loss) from
operations 13,295 654 36,640 (6,513)
Other income 119 - 104 64
Interest income 269 293 659 1,601
Interest expense (120) - (175) (129)
Foreign exchange
transaction gains
(losses) 267 (75) (339) 629
Income (loss) before
income taxes 13,830 872 36,889 (4,348)
Income tax provision 1,707 322 4,013 322
Net income (loss) $12,123 $550 $32,876 $(4,670)
Net income (loss) per
common share:
Basic $0.29 $0.01 $0.80 $(0.11)
Diluted $0.29 $0.01 $0.78 $(0.11)
Weighted average common
shares outstanding
(000's) 41,209 40,857 41,071 40,817
Weighted average common
shares outstanding
for diluted net income
(loss) per common
share (000's) 42,084 41,343 42,159 40,817
GSI LUMONICS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(U.S. GAAP and in thousands of U.S. dollars, except share amounts)
Three Months Ended Nine Months Ended
October 1, September 26, October 1, September 26,
2004 2003 2004 2003
Cash flows from operating activities:
Net income (loss) $12,123 $550 $32,876 $(4,670)
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Loss on disposal of assets - - - 421
Loss on sale of investments - - 15 -
Translation gain on
liquidation of
subsidiary (119) - (119) -
Acquired in-process research
and development - - 430 -
Depreciation and
amortization 3,161 2,536 9,762 7,464
Unrealized loss on
derivatives - 166 - 179
Stock-based
compensation (205) - (86) -
Deferred income taxes (6,986) - (12,676) -
Changes in current assets and liabilities:
Accounts receivable (3,914) 988 (5,912) (3,752)
Inventories (2,969) 1,923 (13,865) 6,537
Other current assets (740) (336) (1,461) (1,029)
Accounts payable, accruals
and taxes payable 7,863 1,970 18,343 2,784
Cash provided by
operating activities 8,214 7,797 27,307 7,934
Cash flows from investing activities:
Acquisitions of businesses - 601 (54,744) (8,952)
Purchase of leased buildings -
- - (18,925)
Sale of assets - - - 847
Other additions to
property, plant and
equipment (520) (910) (1,386) (1,814)
Proceeds from the sale
and maturities of
investments 10,119 20,562 73,224 162,890
Purchases of
investments (7,990) (41,651) (47,426) (154,055)
(Increase) decrease
in other assets (27) 209 (180) 358
Cash provided by
(used in) investing
activities 1,582 (21,189) (30,512) (19,651)
Cash flows from financing activities:
Repayment of other
long-term liability (2) - (2) -
Issue of share capital
from the exercise of
stock options and
employee share
purchase plan 332 393 1,969 507
Cash provided by
financing activities 330 393 1,967 507
Effect of exchange rates
on cash and cash
equivalents (98) 1,298 423 1,626
Increase (decrease) in
cash and cash
equivalents 10,028 (11,701) (815) (9,584)
Cash and cash
equivalents,
beginning of period 53,192 85,750 64,035 83,633
Cash and cash equivalents,
end of period $63,220 $74,049 $63,220 $74,049
GSI LUMONICS INC.
Consolidated Analysis By Segment (unaudited)
(thousands of U.S. dollars)
Three months endedNine months ended
October 1, September 26, October 1, September 26,
Sales: 2004 2003 2004 2003
Components $42,060 $17,992 $117,270 $52,258
Laser Group 11,711 8,470 35,335 24,112
Laser Systems 40,879 19,987 111,246 56,902
Intersegment sales
elimination (3,979) (1,568) (13,790) (2,590)
Total $90,671 $44,881 $250,061 $130,682
Gross profit %:
Components 37.3% 35.5% 37.2% 39.8%
Laser Group 31.6 36.9 30.4 33.8
Laser Systems 43.8 36.2 44.2 33.0
Intersegment sales
elimination 5.3 7.0 8.2 26.5
Total 40.9% 37.1% 40.9% 36.0%
Segment income (loss)
from operations:
Components $7,170 $3,450 $22,375 $11,916
Laser Group 698 507 1,793 118
Laser Systems 11,850 2,729 31,196 2,902
Total by segment 19,718 6,686 55,364 14,936
Unallocated amounts:
Corporate expenses 4,810 4,360 13,970 14,102
Amortization of
purchased intangibles 1,613 1,408 4,324 4,055
Acquired in-process
research and development - - 430 -
Restructuring and other - 264 - 3,292
Income (loss) from
operations $13,295 $654 $36,640 $(6,513)
GSI LUMONICS INC.
Consolidated Sales Analysis By Geographic Region (unaudited)
(millions of U.S. dollars)
Three months ended
October 1, 2004 September 26, 2003
Sales % of Sales % of
Total Total
North America $36.6 40% $19.5 43%
Latin and South America 0.5 1 - -
Europe (EMEA) 12.6 14 8.6 19
Japan 19.7 22 7.9 18
Asia-Pacific, other 21.3 23 8.9 20
Total $90.7 100% $44.9 100%
Nine months ended
October 1, 2004 September 26, 2003
Sales % of Sales % of
Total Total
North America $117.2 47% $68.3 52%
Latin and South America 1.1 - 0.7 1
Europe (EMEA) 38.1 15 19.6 15
Japan 44.6 18 25.0 19
Asia-Pacific, other 49.1 20 17.1 13
Total $250.1 100% $130.7 100%
SOURCE GSI Lumonics
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Company News On-Call:
http://www.prnewswire.com/comp/107189.html
CONTACT:
Investor Relations, Ann Dempsey of GSI
Lumonics, +1-613-224-4868, ext. 2
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